Obama Readies a Fallback Health-Care ProposalScaled-Down Plan Would Expand Insurance to About Half as Many People as Pending Bill EnvisionsBy LAURA MECKLERFEBRUARY 24, 2010

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President Barack Obama will use a bipartisan summit Thursday to push for sweeping health-care legislation, but if that fails to generate enough support the White House has prepared the outlines of a more modest plan. His leading alternate approach would provide health insurance to perhaps 15 million Americans, about half what the comprehensive bill would cover, according to two people familiar with the planning.

It would do that by requiring insurance companies to allow people up to 26 years old to stay on their parents' health plans, and by modestly expanding two federal-state health programs, Medicaid and the Children's Health Insurance Program, one person said. The cost to the federal government would be about one-fourth the price tag for the broader effort, which the White House has said would cost about $950 billion over 10 years.

Officials cautioned that no final decisions had been made but said the smaller plan's outlines are in place in case the larger plan fails.

Such a move would disappoint many Democrats, including Mr. Obama. They have worked for more than a year to pass comprehensive legislation like the plan the president unveiled Monday, which would cover the bulk of the 46 million uninsured people in the U.S., set new rules for health insurers and try to control spiraling health-care costs. Liberal Democrats in particular would be dismayed by any ratcheting back of ambitions. But more-conservative Democrats nervous about the fall elections could be more comfortable with a scaled-back measure.

The ideas in the White House's fallback plan are in tune with earlier incremental Democratic efforts. In the 1980s, Democrats expanded eligibility for Medicaid, the joint federal-state health program for the poor. In 1997, after failing to pass President Bill Clinton's comprehensive package, Congress created the Children's Health Insurance Program, for children in working poor families. Last year, Mr. Obama signed into law a bill expanding that program to encompass four million more kids.

The larger Obama health plan has been in jeopardy since last month, when Democrats lost a Senate seat from Massachusetts and with it their filibuster-proof majority in the chamber. With many congressional Democrats spooked, the White House considered more-modest measures that would be easier to pass.

As he was weighing his choices, Mr. Obama asked his staff to show him what a more modest policy might look like, and the plan to cover about 15 million people was the most promising, a senior White House official said. "He wanted people to look at what effect you could have on the overall problem if you have to go smaller," the official said.

White House Chief of Staff Rahm Emanuel didn't devise the smaller policy, the official said. But Mr. Emanuel argued that it wasn't feasible to pass a comprehensive bill and counseled a lesser version, according to several people familiar with the conversations. Others argued that Democrats were going to take a political hit by voting for a health-care bill no matter what, and they should opt for a sweeping measure whose benefits would be easier to highlight.

Another argument made by those pushing for major change: Why run for office if not to address big problems such as health care?

Administration officials with knowledge of current health care negotiations pushed back Wednesday evening against a report that the White House is readying a paired-down version of reform should the current proposal fail to win sufficient congressional support.

Hours before Thursday's much anticipated White House health care summit, the Wall Street Journal reported that the president and his team are "working on a more modest Plan B", just in case. This alternate approach would provide insurance to approximately 15 million uninsured Americans, or half as many as the current plan, and would include modest expansions of Medicaid and the Children's Health Insurance Program -- all in all, a far cry from the current legislation under consideration.

The Journal reported that "no final decisions had been made" with regards to the Plan B approach. But one administration official who spoke to HuffPost insisted that while a fallback option had been developed, it is not even on the administration's radar.

"This proposal was developed because the president wanted to know what the impact would be if he had to go small post-Massachusetts Senate race. It's not where we are," the official said.

"As you can tell from covering the news this week," the official added, "this is not the proposal we're pursuing."

The president has instead -- as the administration official notes -- placed his chips behind a comprehensive package of insurance reform and coverage expansion. Based on the Senate's legislation, with fixes taken from the version passed by the House, Obama's plan would cost roughly $950 billion over the course of 10 years. It would cover more than 30 million uninsured with expansions to Medicaid, the establishment of state health insurance exchange pools, and major subsidies to help individuals purchase coverage, among other reforms.

The fallback option would roughly halve those achievements, relying on incremental, less controversial reform proposals. The idea is that, as a last ditch gambit, the Plan B proposal could net the White House the bipartisan support necessary for a much-needed health care victory.

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